Winning bids: a ‘race to the bottom?’

Tendering for contracts is a vital step when growing any business. Securing work via a bidding process enables you to win a larger market share and is necessary for nearly all companies at some stage. We discuss how investing in quality can be as important as chasing the bottom line.

Should you invest in quality?

No matter what service you provide, to compete successfully with other suppliers in the market you must recognise the importance of investing in quality. No buyer, in either the public or the private sector, will award contracts to a company they deem to be poor value for money, and this incorporates quality as well as cost. When tendering for a contract, you will be assessed on your price and a series of quality-focused questions.

Yes, the tendering process is one of compliance and jumping through necessary hoops, but more importantly it focuses on delivering outcomes, providing a reliable and high-quality service, and added value. Demonstrating this is what really sets you apart from other suppliers: compliance alone will never be enough to win.

Investing in quality – think training, innovation, technology and people – is essential to provide your organisation with bid collateral and an edge over your competitors. It all provides strong ammunition when you are asked questions around social value, innovation and training in a bid submission. Examples include investing in state-of-the-art technology to deliver efficiency in the market that no competitor has achieved, or developing a bespoke training centre to upskill apprentices and local people inhouse.

Aligning your company with a commissioning authority or buyer’s strategic aims allows you to tailor your offering to fit the overall aims of the contract – if the buyer is particularly focused on social value, you should commit to investing in this area and look for new ways to add value to the local community.

Price versus quality

The price versus quality scenario in a procurement exercise is often deemed as ‘unfair’ or ‘a fix’, with the pricing assessment driving certain suppliers away completely. Yes, the public sector has an obligation to assess suppliers on both financial and quality grounds, but if a tender process is swayed heavily to price, you can still take this into your own hands.

‘Racing to the bottom’ in the pricing might help the bidder to win that contract, but it’ll be on less favourable terms – whereas focusing on non-price competition and investing to enhance the quality score can have the same effect in increasing the likelihood of success, but with the difference that when you bid in the future the investment has already been made. You can reap the benefits for years to come as you’ll have a more attractive offer for all buyers, and your investment will also feed into company-wide continual improvement

To discuss how Executive Compass can support you to secure new contracts, find out more and contact our team today.